A computer with a useful life of 12 years has initial cost of $3200 and a salvage value of $100. interest rate is 10%. Using the Modified Accelera Cost Recovery System (MACRS) method of depre- tion and a 10 year recovery period, what is most nea the book value of the computer after the second yea (A) $1900 (B) $2100 (C) $2300

EBK CONTEMPORARY FINANCIAL MANAGEMENT
14th Edition
ISBN:9781337514835
Author:MOYER
Publisher:MOYER
Chapter9: Capital Budgeting And Cash Flow Analysis
Section9.A: Depreciation
Problem 1P
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12. A computer with a useful life of 12 years has an
initial cost of $3200 and a salvage value of $100. The
interest rate is 10%. Using the Modified Accelerated
Cost Recovery System (MACRS) method of deprecia-
tion and a 10 year recovery period, what is most nearly
the book value of the computer after the second year?
(A) $1900
(B) $2100
(C) $2300
(D) $2400
Transcribed Image Text:12. A computer with a useful life of 12 years has an initial cost of $3200 and a salvage value of $100. The interest rate is 10%. Using the Modified Accelerated Cost Recovery System (MACRS) method of deprecia- tion and a 10 year recovery period, what is most nearly the book value of the computer after the second year? (A) $1900 (B) $2100 (C) $2300 (D) $2400
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